The booming economy has created a labor shortage. So why are wages still low? Because employers are conspiring to make workers, even in low-wage sectors like fast food, incapable of leaving. Welcome to the era of monopsony-driven slave labor.
Your Boss Is Conspiring With Your Would-Be Future Boss To Keep You From Ever Getting a Raise
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Freely contracted agreements between parties of equal power – the very basis of capitalism. What’s not to like, Ted ?…
Henri
Another example of monopsony power is the law prohibiting Medicare, the largest purchaser of pharmaceuticals, from using their market power to reduce Big Pharma’s prices and profits.
The Veterans Administration is allowed to use its purchasing power to negotiate lower prices, but Medicare is prohibited to do so in it’s Part D legislation.
The US has pretend legislators and pretend voters resulting in a pretend democracy.
Actually, Glenn, allowing Medicare to negotiate to lower prices would be an exercise of monopsony – or rather, oligopsony power, in which a single or a few buyers exert power over sellers. The US law, to the benefit of big pharma, prohibits this ; thus it is not the would-be mono/oligopsonist, but the real mono/oligopolists – the pharmaceutical companies, that have the advantage. Wonder how that came about ?…
Henri
Short answer.
Not by pretend democracy, but by Big Money steering Big Government.
“Actually, Glenn, allowing Medicare to negotiate to lower prices would be an exercise of monopsony”
Not “would be” but “is”.
“Actually” is not needed in this what should be a declarative phrase.
Your phrase above is venturing close to the hypothetical subjunctive. That’s neither necessary nor correct.
Actually, Glenn, if your statement that Medicare is prohibited from negotiating with the pharmaceutical companies in order to obtain lower prices is, in fact, true – and I assume it is – then my first reply above is, indeed, a hypothetical – counterfactual – rather than a declarative statement, thus the need for modal verb «would»….
Henri
“Another example of monopsony power is the law prohibiting Medicare, the largest purchaser of pharmaceuticals, from using their market power to reduce Big Pharma’s prices and profits.”
What I didn’t make clear here but was so obvious to me that I neglected to state it explicitly, was that price setting by the market by Medicare would develop a monopsony.
That a law was foreseen by legislator as necessary to prohibit development of a monopsony is evidence of market interference by government to protect the wealthy at the expense of consumers.
This is corporatism, an element of fascism.
re: “Low-wage bosses actually do this!”
So do high-wage bosses. It’s *technically* illegal to prevent someone for looking for work, but just try to get it enforced.